Shanghai Plans to do Stock Trading Link with the London Stock Exchange
The United Kingdom with China are now exploring the launch of a planned stock trading link between Shanghai and London stock exchanges that will highlight the strong desire of both sides in strengthening cooperation in the capital market. In a document issued by the UK government finance ministry stated that the Shanghai and London agreed to do a feasibility study on the connection scheme between the two bourses. The announcement came during a speech by the British Chancellor of the Exchequer George Osborne at the Shanghai Stock Exchange.
Sources say that Osborne asked to deliver his speech at the trading hall of the Shanghai Stock Exchange which a iconic place for China’s capital market indicating the strong British interest in having a partnership with the Shanghai bourse. The Shanghai Stock Exchange declined to give any details or timetable of the planned launch of the trading link with the London bourse. Analysts are saying that the planned Shanghai-London trading link is a clear message that is hoped to energize investor sentiment after both Chinese and world equities market were weighted down by rising uncertainties.
The message is giving out that Beijing is hoping to lift it’s A-share market with the possibility of expanding market access to more foreign investors and London will be happy to see more investment from Chine into its stock market. According to the director of economic research at the China Center for International Economic Exchanges Xu Hongcai that it underscored the mutual desire to seek greater cooperation in the capital markets.
London hopes to attract more Chinese companies into listing in its stock exchange as Beijing sees London as a key market in expanding the internationalization of the yuan. it is likely that the London-Shanghai stock trading link will operate under trading rules and investment quotas that is similar to the Shanghai-Hong Kong stock Connect Scheme that allows overseas investors to trade Shanghai shares in Hong Kong and mainland investors in trading Hong Kong shares in Shanghai.